Opposition Leader Barry O'Farrell said a faulty camera network and inadequate signage were at the heart of the problem and motorists were likely to lose confidence in the system.

"With the Keneally Labor government increasing the number of speed cameras in use, it needs to assure motorists they aren't being fined incorrectly," he said.

"This high level of repayment will cast doubt in motorists' minds about the fairness of speed camera fines and that doubt must be cleared up."

However, a spokeswoman for Roads Minister David Borger rejected Mr O'Farrell's claims.

She said no fines issued in the Illawarra were the result of faulty cameras or equipment.

‘‘Speeding fines are withdrawn for a range of reasons, including in cases of inadequate signage, vehicles where the registered owner is deceased, emergency vehicles detected while on official duty, where vehicles are found to be stolen, and faulty cameras,’’ she said.

An RTA spokesman said only 1600 withdrawn penalties had been the result of inaccurate readings since the program began 10 years ago and these were all in the Sydney region.

Documents obtained by the NSW Coalition for all cameras across the state show nearly 19,000 fines, totalling $3.8million, were withdrawn between July 2007 and May this year.

In the Illawarra, 395 fines worth $85,107 were annulled during the period.